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From the Fact Check Desk: Did the NYT Say Clinton's Gas Tax Vacation Plan Would 'Boost Oil Industry Profits'?

May 04, 2008 8:29 PM

Sen. Barack Obama's new attack ad "Boost" -- running in Indiana and North Carolina (watch the Tarheel version HERE) -- is being called into question by camp Clinton for the alleged mis-use of a quote.

Let us delve.

The quote in the ad says of Clinton's gas tax vacation proposal, "experts say it will boost oil industry profits," and it cites the New York Times on April 28, referring to a column by Paul Krugman -- generally a columnist supportive of Senator Clinton's plans.

But the column in question -- and the quote -- have nothing to do with Clinton. They have to do with Sen. John McCain's gas tax holiday proposal -- which Krugman refers to as "a measure that would, in fact, do little to help consumers, although it would boost oil industry profits."

In fact, Clinton's name doesn't appear in the column even once.

But a day later, in his blog, Krugman wrote "John McCain has a really bad idea on gasoline, Hillary Clinton is emulating him (but with a twist that makes her plan pointless rather than evil), and Barack Obama, to his credit, says no. Why doesn’t cutting the gas tax this summer make sense? It’s Econ 101 tax incidence theory: if the supply of a good is more or less unresponsive to the price, the price to consumers will always rise until the quantity demanded falls to match the quantity supplied. Cut taxes, and all that happens is that the pretax price rises by the same amount."

Krugman says that the "McCain gas tax plan is a giveaway to oil companies, disguised as a gift to consumers. Is the supply of gasoline really fixed? For this coming summer, it is. Refineries normally run flat out in the summer, the season of peak driving. Any elasticity in the supply comes earlier in the year, when refiners decide how much to put in inventories. The McCain/Clinton gas tax proposal comes too late for that. So it’s Econ 101: the tax cut really goes to the oil companies."

And then this key sentence: "The Clinton twist is that she proposes paying for the revenue loss with an excess profits tax on oil companies. In one pocket, out the other. So it’s pointless, not evil. But it is pointless, and disappointing."

So he suggests that Clinton's gas tax proposal will give revenues to oil companies then take them away with her "windfall profits tax."

Today on a conference call, the effervescent Phil Singer of the Clinton campaign complained that Obama's ad "actually takes a line and uses a column about criticizing Senator McCain’s approach to support the gas tax in order to criticize Senator Clinton...they are misquoting a column to make an attack on Senator Clinton."

Obama spokesman Bill Burton says that their campaign doesn't "concede that the McCain and Clinton plans are different." He adds that the Clinton proposal has been widely discredited by economists and many of Sen. Clinton's own supporters. But a debate about the merits of Clinton's proposal is not an answer as to whether the Obama campaign is quoting Krugman correctly.

Singer is on key; the Obama campaign is using that quote falsely.

- jpt

May 4, 2008 in 2008: Democrats | Permalink | Share | User Comments (64)

User Comments

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nort to mention is her threatening the middle east with nuclear destruction and war breaking out there...how does she think that plays with oil economics?

...about as well as the Iraq qar I would guess. Since it is the same foreign policies...she doesn't improve this country she makes it worse.

Posted by: dl | May 5, 2008 6:58:52 AM

Mike, you are stupid, if you're listening to hillary's pandering bs....

Every election, you vote for a candidate, and when the elections over, voters go stick their heads back in the sand. That is why we get the politicians we have....they depend on you going back to sleep after the election. So then everything goes by the wayside, the bs continues and nothing gets done, you know....tradition.

The "change" Obama is talking about, is the people of this country engaging, and remaining engaged, after all the votes are counted. He's talking about accountability, transparency....all those things we don't have now. And if you think we do, I've got a bridge and a tract of land to sell ya.

bill clinton disgraced our house, but most americans suffering from selective amnesia don't have a problem with allowing him back in the white house for his third term. Besides, he's the one that encouraged her to run for the office, after he was impeached.

I don't know about you, but I don't want a short term fix on the gas problem if it will cause me to pay more in the long term. $30 is just that...$30. It will mean nothing if the oil/gas companies dip back into your pocket to make up for the $30 you got 3 or 4 months prior.

So much for pandering. Tell hillary clinton to be honest and stop with all the lies. Now she's calling all the economists elites, because they don't agree with her pander to voters.

uuugggghhhhh I just wish the liar and the bubba would go away.

Posted by: LA in Indiana | May 5, 2008 6:56:33 AM

Your right Hillary's is worse than John McCain's...because she is actually misleading the country to say that hers would be taken care of by money's she can't use until she both ...would have to win (that would be next year...oh yeah?) and she says that infrastructure funds wouldn't be hurt (because of the moneys she will get next year) with a proposal that may not even get approved next year...never mind as it stands in either of she and Obama's proposals...and that same proposal for windfall profit tax ...she has already used in her plan...

Her plan is another lie to the voters...just to win.

Not to mention all the other issues with plain old economics...the the oil companies will not be able to help the fact that they will re-rise to the old highs quickly (unless she makes a "deal" with them to hold off and what is the return on that deal)

this is slimier than Mccain's, once again ...because she is caught in the middle of a battle so she will dupe all the lower income and less educated voters because her being President is more important than the voters.

This woman is a bull in an emergency room. She is the last thing this country needs.

Posted by: dl | May 5, 2008 6:55:40 AM

HILLARY CLINTON CAN BEST WIN IN NOVEMBER:

It's time for everyone to face the truth. Barack Obama has no real chance of winning the national election in November at this time. His crushing defeat in Pennsylvania makes that fact crystal clear. His best, and only real chance of winning in November is on a ticket with Hillary Clinton as her VP.

Hillary Clinton seemed almost somber at her Pennsylvania victory speech. As if part of her was hoping Obama could have proved he had some chance of winning against the republican attack machine, and their unlimited money, and resources.

But it is absolutely essential that the democrats take back the Whitehouse in November. America, and the American people are in a very desperate condition now. And the whole World has been doing all that they can to help keep us propped up.

Hillary Clinton say's that the heat, and decisions in the Whitehouse are much tougher than the ones on the campaign trail. But I think Mr. Obama faces a test of whether he has what it takes to be a commander and chief by facing the difficult facts, and the truth before him. And by doing what is best for the American people by dropping out of the race, and offering his whole hearted assistance to Hillary Clinton to help her take back the Whitehouse for the American people, and the World.

Mr. Obama is a great speaker. And I am confident he can explain to the American people the need, and wisdom of such a personal sacrifice for them. It should be clear to everyone by now that Hillary Clinton is fighting her heart out for the American people. She has known for a long time that Mr. Obama can not win this November. You have to remember that the Clinton's have won the Whitehouse twice before. They know what it takes.

If Mr. Obama fails his test of commander and chief we can only hope that Hillary Clinton can continue her heroic fight for the American people. And that she prevails. She will need all the continual support and help we can give her. She may fight like a superhuman. But she is only human.

Sen. Hillary Clinton: "You know, more people have now voted for me than have voted for my opponent. In fact, I now have more votes than anybody has ever had in a primary contest for a nomination. And it's also clear that we've got nine more important contests to go."

Sincerely

Jacksmith... Working Class :-)

Posted by: jacksmith | May 5, 2008 5:17:15 AM

Wow ted daddy.

Enjoy your CULT of LIES.

If you want to believe the wizard of Oz and his bald faced lies. Go ahead .

Posted by: tomdavie | May 5, 2008 4:44:54 AM

plain brown.

At first, Obama said it would only net 3/5 of the savings to the consumer as speculators would tweak prices.

So they got 150 obama supporters -I mean 'neutral' economists to say that it wont work.

Well then, why not JACK UP THE TAX then.

Wont that drive the speculation price down?

Then they can give the extra tax back to consumers when they file at the end of the year.

Posted by: tomdavie | May 5, 2008 3:19:33 AM

I don't get this "new" politics business. Politics is what it is. America has had a long political history of many turns for over 200 years. For obama to say he is "new" politics, what does it mean?

He must think we are stupid.

Posted by: Mike | May 5, 2008 2:03:31 AM

obama lies about the facts. then when called on his lie, he doesn't answer that, but just quibbles about the issue. and the fawning media doesn't report that he lied or ask tough follow up questions - they just let his "explanation" go. typical.

and even his quibbling reveals his stupidity - he doesn't "concede" that the two positions are different? one has a windfall profits tax and one doesn't. doesn't take much intelligence to see that the two are different. of course, i never thought obama had much intelligence anyway.

Posted by: so saddened | May 5, 2008 1:23:46 AM

I was a beneficiary of the IL gas tax holiday and it did help! Obama voted for it, and is simply using "distractions" and "lies" as a way to get elected. I voted for him in 2004 and felt it was an informed decision based on the information about him that was available at the time (like Hillary did on the war vote.) I now apologize to America, given the information that is now coming out on how Obama continues to underplay his relationships with Rezko and others. The main point is that the Republicans will use this against him in the GE, and we will lose our chance to elect a moderate Democrat, which is far better than another Republican.

Posted by: IL resident | May 5, 2008 12:50:50 AM

same old washington politics. so much for hope and change. misrepresenting the truth is the same as lying.

Posted by: sonia trevino | May 5, 2008 12:44:04 AM

But, Harley, the fact is Obama and his campaign has never called Hillary a murderer or a racist. They have called her a liar, in not so many words, and the truth is... they're correct.

It's not an ugly smear, it's not a vicious attack, it's simply the truth. Hillary claims the gas tax holiday will work, and it's simply not true, and worse yet, she's smart enough to know better, so it's a lie within a lie.

Calling her on that is his job as her competitor. Plain and simple.

Jake's article is nit-picking a journalistic quote detail, but the bottom line is, the claims the Obama ad makes are true and correct, and the spirit and gist of the article the ad quotes is right on, if not the details.

He's basically misquoted someone, but not misrepresented a thing, and could easily have chosen another quote by the same source that would have better fit the ad and been more accurate.

There, happy?

Posted by: fontapa | May 4, 2008 11:54:44 PM

I thought Obama was suppose to be honest and stand for truth and justice and all that other Superman goody goody bullshit that most of us can see through. He's just another pol that wants to get elected and he thinks that as long as he's not the one calling Hillary a liar, a cheat or a murderer but his campaign is, then he isn't looked at as NEGATIVE. Riiiight. His campaign has called Hillary everything from a liar to a racist and we are suppose to believe him? Not today Barack.

Posted by: Harley. | May 4, 2008 11:48:39 PM

SJ,

Take a deep breath.

First off, it's not a stimulus package, it's a tax credit.

Secondly, the gas tax holiday is never going to happen, per just about everybody but Hillary and McCain. Why? Because it won't work. The news of the tax holiday will not be lost on energy traders and oil companies. I'll spare you the formulas, but basically demand will drive the price up to more than compensate for your supposed savings. Even if we tied their hands (which we can't under current law) the short-term releif in price will simply drive up consumption, and in a few days time the same effect will take place and demand will cause prices to rise again.

Already at this point in our story, we can see this won't work, but lets talk about windfall taxes. So you're Big Oil and you get a windfall tax bill from the IRS. What do you do?

A) Swallow the cost by cutting back in company expenditures like R&D, employee salaries, developement, bonuses, and lobbying, all of which hurt your business.

B) Pass the cost onto shareholders in the form of reduced dividends, causing them to sack you and your management team.

C) Raise gas prices to recoup the cost from consumers. No harm to your business, your shareholders are happy, and if you play it right, you can raise prices a smidge more than neccessary to recoup your costs, and get... ANOTHER WINDFALL!! Happy days are here again...

If you beleive Hillary hasn't been able to think this out and know it for the crock that it is, you're dreaming. She's far too intelligent for that.

You've been had, friend. That's what the media is trying to tell you, that's why they're all over her.

Pandering is a lie or a blatant handout that serves no productive end other than to boost votes. If the gas tax holiday WORKED and it got her votes, it wouldn't be a pander.

The credits Obama's talking about work, do provide releif, and will get him votes, so the media has no need to attack him on them. See how that works?

Posted by: fontapa | May 4, 2008 11:32:52 PM

Poll results just in:

Americans are divided on the gas tax holiday by income: Americans making under $30,000 a year approve of a gas tax “holiday” for the summer, but most Americans making more do not.

If we want relief for the gas taxes and costs give to those earning less than $40,000. Hillary wouldn't propose that because it wouldn't help Walmart fuel their trucks. Lord help me, I didn't think about this until the other day but it helps her cronies in Arkansas too much not to be true.

Posted by: Oscar Meyer | May 4, 2008 11:30:37 PM

Obama says no to the gas tax call is pandering for votes but tonight at the JJ dinner he is saying he is willing to give all $1000 stimulus package, and the night before he was all for spending 10billion in NC.

Is that not pandering? Who is going to pay for this $1000 package not the taxpayer, so he is against getting the oil companies to cover the gas tax for summer but willing to give out money here and there that will cost me more tax dollars?

The MSM really has to dig into this nonsense that Obama is spouting they do it when McCain or Hillary says anything but Obama talks crap and they let it slide, no questions ask as to who is picking up the tab for all this.

Posted by: SJ | May 4, 2008 11:18:16 PM


These Obama supporters are elitist left wing liberals who openly say they want to tax people to make it too expensive to drive.

This is why Republicans have been stomping these limp wristed wusses since 1980 except for Bill Clinton who was too moderate to stomp.

This is just the first of many taxes that Hillary will take off the middle class and shift to the wealthy, a shift that Republicans have been bribed to do for their corporate sponsors throughout the Bush neocon reign.

Keep your eye on the ball. Republicans take away taxes and don't pay for it, borrowing and running up an insurmountable debt for all of us and our future generations.

Obama and his leftists say keep taxing people to control their behavior thee way they want us to behave. That's really beyond socialism even.

Hillary says shift the tax burden from working people to those making record profits. She pays for it with her plan.

What a concept. Our children will thank her even as they curse the neocons 9 trillion dollar debt they have to pay.

Hillary '08

Posted by: rd | May 4, 2008 11:08:58 PM

The ad is not false because Obama does not even buy into the sincerity of Clinton's proposal.

The only thing missing from Paul Krugman's article which everyone else has said is that Bush is not signing a windfall oil profits tax.

Pander

Posted by: Andy E | May 4, 2008 11:04:12 PM

While Hillary talks of fighting:

Quote of the day: "Politics did not lead me to working people. Working people led me to politics."

Barack Obama JJ Dinner May 4, 2008


I was always taught that in an argument that you would like to resolve, you must find areas of agreement.

Posted by: Oscar Meyer | May 4, 2008 11:01:32 PM

Clinton, McCain...... same pander scam, non-starter plan

Posted by: jAYjAY | May 4, 2008 10:58:15 PM

Deception is in the eye of the beholder:

The ABC web unit and television must be completely separate companies. Did anybody else see the national news about Hillary and her commercial that's another Bosnia moment? The short story is that she is blaming Bush for the sale of a company and its sensitive technology called Magnaquench to the Chinese. The trouble is that the Clinton administration approved the sale. The Billeries have said "its Bush's fault because he should have stopped it." In the best ending to a news story Hillary says "I hope the next President remembers Magnaquench." What idiots.

Posted by: Oscar Meyer | May 4, 2008 10:55:06 PM

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